New $199 Nook Tablet to compete with Fire

Company announces new version of its tablet on the same day it posts a profit decline. The new Nook Tablet, with half the memory, shaves $50 off the original's price. Also: Nook Color e-reader is shedding $30.

The Nook Tablet can now be had for the same price as the Kindle Fire.
Sarah Tew/CNET

Barnes & Noble has Amazon's Kindle Fire directly in its sights. Its latest ammunition: a $199 Nook Tablet with 8GB of memory.

The new version of the Nook Tablet--$50 cheaper and with half the memory of the original--now matches the Kindle Fire in price and memory specs. The book retailer hopes the lower price will make it more of a rival to Amazon's tablet, which has established itself as the No. 2 player behind Apple's iPad. Amazon has attracted customers through a lower-end price and a decent selection in its online store.

Barnes & Noble also announced a $30 price drop for the Nook Color e-reader, which will now cost $169.

The company badly needs a success in the tablet arena to offset maturing sales in its traditional book business. The company, which released quarterly earnings today, saw sales rise 5 percent year over year to $2.44 billion. However, profit fell 14 percent from a year ago to $52 million, or 71 cents a share. The earnings report, which covered the three-month period ending January 28, said that per-share earnings would have been 99 cents excluding one-time items.

Analysts, on average, had forecast earnings of 92 cents a share on revenue of $2.53 billion.

The company did see a surge in online sales, driven by purchases of its Nook line of e-readers and tablets.

The company expects full-year revenue of $7 billion to $7.2 billion. Its earnings before interest, taxes, depreciation, and amortization are expected to be $150 million to $180 million, and its per-share loss is expected to be $1.10 to $1.40. The Nook business is expected to generate $1.5 billion in comparable sales this fiscal year, the company said.

The Nook Tablet promises to figure prominently in Barnes & Noble's business. While the Kindle Fire has captured much of the buzz that isn't already surrounding the iPad, the 16GB Nook Tablet at $249 has seen fewer takers. Still, Barnes & Noble could become a stronger competitor with its new 8GB tablet and the large distribution capabilities of its stores.

Like the original Nook Tablet, the new version has a 1GHz dual-core processor and a slot for up to a 32GB microSD card. Both also boast 11.5 hours of reading time and 9 hours of video playback.

The new version of the Nook Tablet and cheaper Nook Color are available at Barnes & Noble's Web site, starting today. The Nook Tablet will also be available at retailers such as Best Buy and Wal-Mart in the coming weeks.

Correction at 7:10 a.m. PT: The story incorrectly stated the amount of memory in the new Nook Tablet, based on the company's press release. The new Nook Tablet has 8GB of memory.

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Roger Cheng is the executive editor in charge of breaking news for CNET News. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade. He's a devoted Trojan alum and Los Angeles Lakers fan.
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